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How to Budget For Future Expenses with WorkingPoint

Topic: Financial Reports,How-to,Managing Your Business | Comments Off on How to Budget For Future Expenses with WorkingPoint

Posted on November 4, 2009 by Kelli Wall

The other day, I showed you how to use the Income Statement to make projections for budgetfuture earnings by averaging your monthly sales so you can spot trends in how your money is coming in, like whether it is driven by season, product line or strategic marketing events.

Just like making projections for future earnings, the Income Statement helps you budget for future expenses. Follow these same steps for comparing your expenses and you’ll see how you’re spending your money on a monthly basis so you can budget for future month’s expenses.

To do this:

  1. Go to the Income Statement.
  2. Choose a date range you want to compare, for example, This Fiscal Year-to-date.
  3. From the Compare Periods drop-down menu, select a period, for example, Month. This will break out the Fiscal Year-to-date into months.
  4. Evaluate the Report:
    • Take an expense category, like Advertising, and average a few months to calculate what you typically spend in a month in that category.
    • Average your total expenses and see what it takes you to run your business on average so you can figure the minimum sales goals you need to hit each month to stay above water. But why just survive when you can thrive? Use the minimum you need to cover expenses as the base for calculating sales goals that increase your profit by double digits.

By reviewing what has happened in the past you can more confidently plan for the future. For more information on the income statement report, check out our online Help Center.

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